U.S. stock futures are pointing to a higher open on Tuesday and the euro is trading lower today against the U.S. dollar after rising to a 3 yr. high and pressuring European stocks yesterday which was a holiday in the U.S. with the celebration of Martin Luther King Jr. Day.
Brent crude is currently trading slightly lower -0.58 percent to 69.84 a barrel (March 2018 futures) but remains at the highest level since July 2015.
More U.S. bank earnings will come into focus this week with Citigroup reporting on Tuesday followed by Bank of America, U.S. Bancorp, and Goldman Sachs on Wednesday.
American Express and Morgan Stanley will provide their earnings report on Thursday for the fiscal quarter ending December 2017.
U.S. lawmakers on Capitol Hill have until Friday January 19th to approve a new budget for the 2018 fiscal year to avert a government shutdown.
Next week, U.S. President Trump will participate in the 2018 Davos World Economic Annual Forum in Switzerland alongside a variety of global bankers, economists, and political leaders including French President Emmanuel Macron and German Chancellor Angela Merkel who is giving consideration to attending.
Climate change will be one of the topics discussed at the annual forum which comes at a time when U.S. President Trump remains a climate change skeptic and has already taken steps to withdraw the U.S. from the historic 2015 Paris Climate Accord and has eliminated a variety of Obama era environmental regulations.
President Trump’s “America First” protectionism and nationalism may stand out from the bi-lateral and multi-lateral mindset from French President Emmanuel Macron and German Chancellor Angela Merkel.
President Trump has already removed the U.S. from the Trans-Pacific Partnership (TPP) with mostly Asian countries and negotiations were halted for the U.S. to participate in the Transatlantic Trade and Investment Partnership (TTIP), a proposed trade agreement between the U.S. and the European Union.
President Trump has also threatened to withdraw the U.S. from NAFTA, a multi-lateral trade agreement between the U.S., Canada, and Mexico.
Mike Rake, Chairman of Worldpay and a director of S&P Global said today on Bloomberg Daybreak that future trade wars could be a bigger risk to the market than geopolitical wars.
“Most of us are deeply concerned about the move towards protectionism, sort of nationalism, the move away from the Trans-Pacific Partnership (TPP), the NAFTA issue, the move away from TTIP (Transatlantic Trade and Investment Partnership).
“All of these issues are really important for global trade. And of course, when you stand back from it they have brought hundred of millions of people out of poverty, created new markets, but as we know politically people have felt left behind by that process, particularly in the West, so I think balancing that and maintaining open markets is critically important you know to that” Rake added.
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